Balancing interests of farmers, consumers to be tough: Assocham

New Delhi, Feb 12 (IANS) Providing farmers a minimum support price (MSP) of 1.5 times the input cost and reining in inflation would be a tough balancing work for the government, said Sandeep Jajodia, President, Assocham here on Monday.

“…government will find it a ‘tightrope walk’ situation in managing the conflicting interests between farm producers and consumers, with inflation maintaining an upward trend for the last six months in a row and possibly moving towards six per cent mark, that can make general households restive,” an Assocham statement quoted him as saying.

“Going forward…farmers growing pulses, for instance would have to be protected along with ensuring adequate remunerative prices for wheat and paddy. Therein lies the problem,” he said, adding that, “with vegetables and fruits having seen notorious gyrations in prices, the overall CPI (Consumer Price Index ) inflation may well cross even the limit of four per cent by the RBI (Reserve Bank of India).”

Speaking at an Assocham managing committee meeting, Jajodia said the question remains whether the consumers, especially those in urban India, would bear with the government and buy the argument that farmers have to be protected.

“Government would find it very difficult to adjust MSPs which do not appear to be in line with promises. Even the formula for costing is being debated in media and among agricultural economists and farmers’ organisations. That means the pressure on retail inflation is bound to be seen,” he said.

The ministries of food and consumer affairs, agriculture, commerce, finance and the Prime Minister’s Office would need to keep a strict vigil on maintaining a balance between interests of growers and consumers, he said, adding, “what makes the situation difficult is that at this point of time, both have become vocal”.